Treasury Wine Estates to offload 12 US wine brands

Australia’s Treasury Wine Estates is preparing to sell 12 of its US brands as part of a continued bid to refocus its efforts on the prestige market, moving away from the entry-level segment.

Michael Clarke, CEO of Treasury Wine Estates

The group said on Monday that it would sell 12 US wine brands that were part of its “non-core” portfolio at “approximately book value”.

A spokesperson said the sale would account for around 1 million cases of wine, however the brands in questions, and potential buyers, were not disclosed.

“The divestment will have nil impact on earnings in F16 and beyond,” the statement added.

The anticipated sale follows chief executive Michael Clarke well documented plans to streamline the company and strip out its “non-core” brands in an efforts to strengthen its premium portfolio.

Clarke’s appointment followed a disastrous 2013/14 fiscal year when Treasury Wine Estates made a loss of AU$101m. A much improved picture emerged in 2015, when the company reported a net profit of AU$77.6 million after tax, a result of $178.5m on the previous year.

The company’s 2015/16 full year results will be released on 18 August.

Last year the company purchased Diageo’s wine business for £361 million, which saw it take on Diageo’s Chateaux & Estate Wine business in the US including brands such as Blossom Hill, Piat d’Or, Beaulieu Vineyards, Acacia, Provenance and Hewitt and Sterling Vineyards.

Clarke described the purchase at the time as a “game-changing” deal that was “highly complementary” to the company’s overall strategic goals.